CAIRO: The Egyptian pound was flat at a central bank dollar sale on Wednesday but weakened significantly on the black market as Egypt's plans to repay a $2.5 billion Qatari deposit raised concerns of a looming dollar shortage, traders said.
The bank offered $40 million on Wednesday and said it had sold $37.6 million at a cut-off price of 7.1401 pounds per dollar, unchanged from its last sale on Monday.
The rates at which banks are allowed to trade dollars are determined by the results of central bank sales, giving the bank effective control over official exchange rates.
But in the unofficial market, the pound was trading at 7.75 to the dollar at midday, weaker than Monday's rate of 6.67 pounds and a marked decline from around 7.57 pounds on Thursday.
"There is pressure because of the Qatari deposit," said one foreign exchange trader at an Egyptian bank. "You are talking about a country where there is a cashflow deficit. Imports exceed exports so there is an imbalance."
Egypt has said it would repay a $2.5 billion deposit to Qatar this month, bringing to $6 billion the deposits it has returned to the gas-exporter that supported elected President Mohamed Mursi of the Muslim Brotherhood.
Egypt's ties with Qatar have soured since the army overthrew Mursi last year, unlocking billions of dollars in aid pledges from other Gulf countries who oppose the Brotherhood.
A government source said this month Egypt had received $1 billion from Kuwait, prompting market concerns that new aid would not cover outflows of foreign currency in a country where dollars are in strong demand to finance imports of food, fuel and manufactured goods.
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